Jul 16, 2012

Wells Fargo — the nation's largest
funder of home mortgages through loan brokers — is calling it quits on
wholesale lending, dealing yet another devastating blow to this
struggling origination channel.

"We will still fund loans through correspondents," a Wells spokeswoman confirmed to National Mortgage News, "but for independent mortgage brokers things will change."
She said the cut-off date is Friday, July 13. Further clarification on the issue will come later today.
According to NMN and the Quarterly Data Report, Wells ranked
first in 1Q in wholesale lending, table funding $7.3 billion of
mortgages through brokers. Provident Funding Associates, Burlingame,
Calif., ranked a close second with $7 billion.
After those two, the next largest player is Flagstar Bank FSB with $2.9 billion.
Wells' decision to exit the channel comes in the wake of a fair
lending settlement with the Justice Department. "While not part of the
DOJ settlement, Wells Fargo, on its own volition, also announced today
that on July 13 it will discontinue funding mortgages that are
originated, priced and sold by independent mortgage brokers through its
mortgage Wholesale channel," the company said in a press statement.
It added: "Mortgages sold by independent brokers in this manner
currently represent five percent of the Company's home mortgage funded
volume. Mortgage brokers operate as independent businesses and are not
employed by Wells Fargo. Therefore, Wells Fargo cannot set loan prices
for independent mortgage brokers nor control the combined effect of the
negotiations that thousands of these independent mortgage brokers
conduct with their customers.
After July 13, 2012, the Company will no longer accept new
applications for loans originated by independent mortgage brokers
through its Wholesale channel, but will work to ensure existing
applications are processed and closed."